of the positions of Chairman and CEO
The Boardís policy is that the positions of Chairman of the Board and Chief Executive Officer should be held by separate persons as an aid in the Boardís oversight of Management
of the Board
The Board has 8 members in accordance with the Corporation's Bylaws, and periodically reviews the appropriate size of the Board.
The Board requires that a substantial majority of its directors has no material relationship with Inter-Tel and is independent within the meaning of the NASDAQ Stock Market, Inc. (NASDAQ) director independence standards, as currently in effect.
Board Membership Criteria
The Governance and Nominating Committee is responsible for reviewing with the Board the appropriate skills and characteristics required of Board members in the context of the current make-up of the Board. In evaluating the suitability of the candidates, the committee considers relevant factors including among other things issues of character, judgment, independence, age, expertise, diversity of experience, other commitments and the like. The committee evaluates such factors, among others, and considers each candidate in the context of the perceived needs of the board of directors as a whole.
of New Director Candidates
The Board is responsible for selecting its own members. The Board delegates the screening process to the Governance and Nominating Committee. Other members of the Board and of Management will be requested to take part in the process as appropriate
Director compensation is designed to enable attraction and retention of highly qualified directors by ensuring that it is in line with peer companies competing for director talent and to address the time, effort, expertise and accountability required of active Board membership.
The Company believes that annual compensation for outside directors should consist of a cash component currently consisting of an annual retainer and a meeting fee to compensate members for their service on the Board and its Committees, and an equity component of stock options vesting over time to align the interests of the directors and the shareowners. Refer to our 2005 Proxy Statement for detailed compensation information.
The primary responsibilities of the Board of Directors are oversight, counseling and direction to the management of the Corporation in the interest and for the benefit of the Corporation's stockholders. The Boardís detailed responsibilities include:
Selecting, regularly evaluating the performance of, and approving the compensation of the Chief Executive Officer and other senior executives
Planning for succession with respect to the position of Chief Executive Officer and monitoring management's succession planning for other senior executives
Reviewing and, where appropriate, approving the Corporation's major financial objectives, strategic and operating plans and actions
Overseeing the conduct of the Corporation's business to evaluate whether the business is being properly managed
Overseeing the processes for maintaining the integrity of the Corporation with regards to its financial statements and other public disclosures, and compliance with law and ethics.
The Board of Directors has delegated to the Chief Executive Officer, working with the other executive officers of the Corporation, the authority and responsibility for managing the business of the Corporation in a manner consistent with the standards and practices of the Corporation, and in accordance with any specific plans, instructions or directions of the Board. The Chief Executive Officer and Management are responsible to seek the advice and, in appropriate situations, the approval of the Board with respect to extraordinary actions to be undertaken by the Corporation.
Members of the Board of Directors shall act at all times in accordance with the requirements of the Corporation's Corporate Business Principles, which shall be applicable to each Director in connection with his or her activities relating to the Corporation. This obligation shall at all times include, without limitation, adherence to the Corporation's policies with respect to conflicts of interest, confidentiality, protection of the Corporation's assets, ethical conduct in business dealings and respect for and compliance with applicable law. Any waiver of the requirements of the Corporate Business Principles with respect to any individual Director shall be reported to, and be subject to the approval of, the Board of Directors.
and Selection of Agenda Items for Board Meetings
Board meetings are scheduled in advance typically typically 4 times per year. In addition to regularly scheduled meetings, Board meetings may be called with appropriate notice at any time to address specific needs of the Corporation. The Board may also take action from time to time by unanimous written consent.
The Chairman of the Board, in consultation with the other members of the Board, draft the agenda for each meeting and distribute it in advance to the Board. Each Director may propose the inclusion of items on the agenda, request the presence of or a report by any member of the Corporation's management, or at any Board meeting raise subjects that are not on the agenda
Material Distributed in Advance
Information that is important to the Board's understanding of the business and its meeting agenda items is distributed in writing to the Board before the Board meets. Supplemental written materials may be provided to the Board on a periodic basis and at any time on request of Board members.
Sensitive subject matters may be discussed at the meeting without written materials being distributed in advance or at the meeting.
to Employees and Board Presentations
The Board has complete access to contact and meet with any Inter-Tel employee. The Board encourages Management to schedule managers to present at Board Meetings who: (a) can provide additional insight into the items being discussed because of personal involvement in these areas, or (b) have future potential that Management believes should be given exposure to the Board.
The Board's policy is to have a separate meeting time for the independent directors regularly scheduled at least twice a year during the regularly scheduled Board Meetings.
Orientation and Continuing Education
The Chief Executive Officer in conjunction with Management are responsible for new-Director orientation programs and for Director continuing education programs. The orientation programs are designed to familiarize new Directors with the Company's businesses, strategies and challenges and to assist Directors in developing and maintaining skills necessary or appropriate for the performance of their responsibilities. Continuing education programs for Board members may include a mix of in-house and third-party presentations and programs.
Evaluation of Chief Executive Officer
The independent Directors, in conjunction with the Corporationís 360-degree review process for employees, will perform a formal annual evaluation of the Chief Executive Officer.
Planning and Management Development
The Chief Executive Officer reviews succession planning and management development with the Board on an annual basis.
Evaluation of the Board
The Governance and Nominating Committee manages the Boardís process for annual Director self-assessment and evaluation of the Board.
may communicate with the Board of Directors by submitting an e-mail to financialinfo@Inter-Tel.com
or by writing to us at Inter-Tel, Incorporated, Attention: